THE DEPARTMENT OF LABOR CERTIFIES LABOR CONDITION APPLICATIONS
A Labor Condition Application (LCA) must be certified by the Department of Labor (DOL) as a condition precedent to the filing of an H-1B Visa Petition with US Citizenship & Immigration Services, Department of Homeland Security (USCIS, DHS).
The LCA contains attestation of the employer’s ongoing responsibilities during the period of LCA certification (up to three years).
Whether or not an H-1B visa application is required to be amended due to material change in the job as defined by USCIS, DHS is irrelevant to the ongoing Wage and Labor obligations of the H-1B employer under 20 CFR 655.731 and 20 CFR 655.734.
DOL ISSUES GUIDANCE IN THE 90s ON LCAs AS WELL AS ON DHS-USCIS H-1B PETITIONS & SETS THE STAGE FOR ENFORCEMENT FRAGMENTATION THAT PERSISTS TO THIS DAY
On November 4, 1996 James Norris, Chief, Division of Foreign Labor Certifications, DOL issued a Guidance Letter to attorney Julia L. Stommes, reprinted in 73 Interpreter Releases 1634-1636 (Nov. 18, 1996) hereinafter the “Norris Letter,” discussing the necessity of amendments when there has been a change in the duties and salary of the Foreign National. Unfortunately, this Interpreter Release, although not widely available, is relied upon by most immigration lawyers and H-1B employers to justify not having to file a new LCA with DOL unless there is a material change in the underlying H-1B job. In this letter, the DOL makes clear that any change of a material nature on the LCA requires a filing of a new LCA. There is no provision for amending an LCA.
SKILL LEVEL OF H-1B EMPLOYEE
The level of skill required by the employer for the job opportunity is to be considered in making prevailing wage determinations. In the past, the DOL’s Occupational Employment Statistics (OES) wage survey produced two wage levels that distinguished between positions requiring significantly different degrees of skills in the occupation. Legislation enacted in 2004 (The Consolidated Appropriations Act of 2005) provides that the DOL’s OES surveys are to provide at least four levels of wages commensurate with experience, education, and level of supervision in lieu of the previous two-level system. The four-tier wage system went into effect on March 8, 2005. The guidance provides a step-by-step procedure for selecting the appropriate wage level for prevailing wage purposes.
A redacted LCA (Form ETA 9035E) certified for 10/01/2004 to 10/1/2007 is below.
The “old LCA” is distinguishable from the current LCA in that the pre-2005 LCA does not include check boxes to identify any Wage Level and specifying the salary range is optional. In contrast, the current LCA clearly shows whether the H-1B employee is a Level 1, 2, 3, or 4 employee with the attendant required wage range for each level. DOL will certify LCAs in which the salary range is listed as the [minimum prevailing wage] to “N/A” or “$0.00” and has also certified LCAs for non-existent work sites.
20 CFR 655.731(a)(1) states where the employer’s pay system or scale provides for adjustment during the period of the LCA—e.g., cost of living increase or other periodic adjustments, or the employee moves to a more advanced level in the same occupation—such adjustments shall be provided to similarly employed H-1B non-immigrants (unless the prevailing wage is higher than the actual wage).
It is not uncommon for H-1B employees to be promoted during the 3 year period of the LCA thus changing the LCA on its face. For example, by promoting a Level 1 entry level employee into a Level 3 manager or supervisor. That change, based on subsequent legislation (discussed below) now requires a new LCA to be filed, contradicting prior 90s era Guidance. However, it remains firmly entrenched in the immigration community that unless an amended H-1B Visa Petition must be filed with USCIS-DHS, a new LCA need not be filed with the DOL.
Because of the fragmentation between the DOL and USCIS-DHS, the three year term of the LCA provides what many lawyers and employers believe is a three year wage embargo on the salary of the H-1B employee.
DESPITE THE ARCANE “GUIDANCE” ON WHETHER OR NOT AN AMENDED H-1B APPLICATION IS TO BE FILED WITH USCIS-DHS, DOL OBLIGATIONS UPON THE H-1B EMPLOYER ARE ONGOING
The Norris Letter also goes on to say notwithstanding whether a new LCA is required to be filed, “… the underlying prevailing wage determination, must still be valid. For example, if the employer obtained a prevailing wage rate from a State Employment Security Agency (SESA) for an entry level worker and the promotion moves the H-1B non-immigrant into the experienced level category, the new rate of pay must be no less than the higher of the adjusted actual wage rate or prevailing wage rate for the new position….”
“Lastly, in accordance with §____,760(a)(2), the employer shall insert documentation in the public access file in support of the LCA which provides the wage rate to be paid to the H-1B foreign worker after the promotion and corresponding increase in pay.”
In reality what happens is a Level 1 Entry Level H-1B foreign worker is hired. He or she is promoted or simply is assigned Level 2, 3 or 4 job duties during the three year Level 1 LCA period. The Employer is under the mistaken belief, at best, or knowingly, at worst, that the Level 1 LCA provides the Employer safe harbor to continue to pay the foreign worker depressed wages.
Whether unintended or intentional, the result is that no Level 3 American Applicant can compete with an H-1B foreign worker who will perform a Level 3 management job at Level 1 entry level worker wages and who is bound to continue to do so for three years under the H-1B LCA.
LEGISLATIVE HISTORY & INTENT OF DOL LABOR CONDITION REQUIREMENT
The LCA requirement was added to the Immigration and National Act by the Immigration Act of 1990. The requirement was extensively amended by the Miscellaneous and Technical Immigration and Nationality Amendments of 1991 and most recently in 1998 by the American Competitiveness and Workforce Improvement ACT. Its basic core remains intact: Employers must make several attestations before being given permission to hire H-1B workers. The congressional purpose in enacting the LCA requirements is to protect U.S. workers.
As originally enacted in 1990, Congress sought to assure that employment of H-1B workers did not adversely affect the wages and working conditions of U.S. workers. A corollary, but secondary, purpose of the LCA requirement was to assure that H-1B workers were not exploited by the U.S. employers through the payment of substandard wages. The LCA procedure was established to create a level playing field for U.S. and foreign workers by removing the incentive to prefer foreign workers who could be paid less than prevailing wages under the INA prior to the enactment of the 1990 Act. Mandating that H-1B workers be paid the “required wage rate,” which is at least the prevailing wage for similarly employed workers in the occupation in the area of intended employment, put U.S. workers on competitively equal footing with foreign workers, and in practice gave them an advantage because meeting the H-1B substantive and paperwork requirements places a burden on employers without commensurate benefit.
Under these circumstances, there are only two reasons to hire H-1B workers: (1) a labor shortage; or (2) a desire to hire a foreign national who has such superior skills, knowledge, expertise or accomplishments that, on balance, such hiring will enhance the employer’s economic position despite the attendant costs of the H-1B application process.
Excerpted in pertinent part from H-1B Handbook by Austin T. Fragoman, et al.
H-1B Lawyers and Employers are under the overwhelming misconception that where an amended or new H-1B Visa Petition is not required, neither is a new LCA. That notion is contrary to the Legislative History and Intent of Congress in enacting the requirement of the LCA and the plain meaning of the law.
ONGOING, INDUSTRYWIDE VIOLATIONS
Notwithstanding the irresponsible reliance on outdated 90s era “Guidance,” H-1B employers must nonetheless meet their ongoing obligations under 20 CFR 655.760(a)(2), 655.760(a)(3) and 655.750(b)(3) to otherwise document that the H-1B foreign workers’ salaries currently meet either the actual or prevailing wage when the foreign worker’s duties move him or her from a lower Level to a higher Level Position, even if only in execution of the foreign worker’s duties and in the absence of a formal promotion.
Relying on 90s era guidance and ignoring the Congressional intent of substantial subsequent legislation has resulted in the firmly entrenched belief by lawyers and employers that the certification of a low level LCA by the Department of Labor provides a de facto three year salary embargo upon H-1B foreign workers.
Reflecting the height of irony or grievous abuse, the result is an American Job Market wide open to exactly what the LCA legislation was intended to circumvent—the depression of American wages and the displacement of American workers.